Germany, Europe’s largest auto market, saw plugin electric vehicles take 24.3% share in April 2022, up from 22.1% YoY. Overall auto volume was down, by over 21% YoY, and over 40% compared to pre-pandemic seasonal norms. Supply chain disruptions and cost inflation were largely responsible for the poor performance, though general economic pressures were affecting both supply-side and demand-side.
April’s combined plugin result comprised 12.3% battery electrics (BEVs), and 12.0% plugin hybrids (PHEVs). This compares to 10.4% and 11.8%, respectively, in April 2021. BEVs have currently lost weighting compared to H2 2021.
With overall auto market volume down even on the dismal performance of last year, all powertrains (including plugins) were down in volume Yoy. Combustion-only powertrains faired worst in terms of volume drop, with diesel sales down almost 30% Yoy, and petrol down almost 28%.
Despite their marginal growth in share, even combined plugins were down in volume, 13.6% Yoy.
The federal ministry of economics said in early May that auto production fell 14.0% in March, amongst a broader drop in capital goods production of 6.6%. With more increases in energy prices and raw materials prices, Ifo Institute Surveys of auto manufacturers showed a further decline in sentiment from March to April. Auto manufacturers also said they will pass on higher costs to consumers, thus affecting demand.
With current BEV market leader Tesla not having any large scheduled deliveries in April, other marques and models had a chance to shine, with the Fiat 500e coming out on top.
Several models saw a significant change in April. The Mercedes EQE had its first month of volume registrations (322 units). The MG ZS saw 381 units, almost twice its previous high, back in November. The Renault Zoe on the other hand saw registrations drop to 742 units, from an average of 1,131 over the previous 3 months, though this is likely mainly due to regional allocation decisions.
Taking a step back to the more normalized perspective of the whole trailing quarter, the Tesla Model 3 took the top spot, with Model Y in 3rd, with the Fiat 500e splitting them up, in 2nd.
Again there are some changes compared to the previous 3 month period (November to January), mostly indicating BEV models that are ramping up availability (as well as demand), and some entering retirement.
The Mercedes EQB stepped up in registered volume by some 5x over the period, seeing a healthy 1,405 units over the February to April period, from 295 previously. The BMW i4 increased 2.7x to 755 units.
On the flip side, the Volkswagen e-Up! dropped from 8,681 units in Nov-Jan, down to 1,735 in the most recent 3 months. Still doing okay, but obviously well past its recent peaks. Its two cousins, the SEAT Mii, and Skoda Citigo, had already dropped out in January ’22, and August ’21, respectively.
The Renault Group’s Dacia Spring, and Renault Zoe, both dropped to around a third of their Nov-Jan volumes. This is likely to be a regional allocation decision, perhaps with some waning of German demand, rather than any indication of a significant ramp down in production.
Let’s finally review the relative performance of the manufacturing groups, with Volkswagen Group still in the lead:
What’s notable, however, is that Volkswagen Group’s share of the German BEV market has dropped from over 26% in the final quarter of 2021, to just under 20% in the most recent trailing quarter. Meanwhile, over the same period, Tesla gained from just under 12% to nearly 18%.
Volkswagen Group’s trajectory may partly result from a self-registration push before the end of 2021, to meet emissions targets (and corresponding drop in early 2022), and now compounded by the supply chain issues noted above.
Hyundai Motor Group also gained over the period, from just over 9% to almost 12%.
As almost everywhere else, with higher fuel prices, those German consumers are still able to buy a new car are likely looking at plugins more than ever before. There is thus no issue with relative demand for plugins compared to other powertrains.
Economic sentiment may mean that volume of demand, across all powertrainsis lower than it otherwise would be, but plugins should be least affected, due to that avoided-fuel-cost advantage.
The broader issue, both for plugins and autos more generally (as well as wider industrial production), is the combination of supply material cost increases and supply availability constraints, energy input cost increases and constraints, and the resulting economic impacts, both on supply and consumer demand.
The early indicators of economic and industrial activity, and sentiment, that I linked to above, do not bode well for the German auto industry (the heart of Europe’s industrial economy). Plugins will likely continue to increase their market share this year, but against the background of reduced overall auto market volumes, and reduced general industrial and economic activity.
What are your thoughts on the outlook for the Germany auto industry? Please jump in to the discussion in the comments below.
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